Statutory Code: Regulation is 'necessary' and decision will be announced soon, says Vince Cable

By Ellie Bothwell

- Last updated on GMT

Related tags Pub companies Liberal democrats Government

Vince Cable: 'The overall sense is that the tie arrangements are unfair and lack of transparency causes severe imbalance in negotiating power'
Vince Cable: 'The overall sense is that the tie arrangements are unfair and lack of transparency causes severe imbalance in negotiating power'
Business secretary Vince Cable has said statutory regulation governing the relationship between pub companies and their tenants is “necessary” and the trade will “soon hear how [the Government] will take that forward”.

Speaking during Labour’s opposition debate in the House of Commons today, Cable reiterated that there is not a problem with the tied model itself, but the “unfairness” in how it operates.

'Severe imbalance'

“The overall sense is that the tie arrangements are unfair and lack of transparency causes severe imbalance in negotiating power,” he said.

“People in the industry want clarity and regulatory certainty. We’re trying to do this properly and it will be dealt with in a timely way.”

He added that although he could not give a specific date on when a decision will be reached, the Government is conscious of the legislative timetable in relation to the next general election.

He cited the overwhelming response to the consultation – more than 9,000 submissions, over 1,000 of which are “very specific” – as the reason for a delay in a decision.

However, Paul Murphy, Labour MP for Torfaen and a supporter of the code, remained sceptical.

“I cannot believe for one second that nothing other than Government disagreement is causing this delay. The longer the delay goes on the greater the damage is being done to public houses,” he said.

Key steps

Toby Perkins MP, Labour’s shadow pubs minister, moved the motion and called for three key measures to be introduced as part of a statutory code: a mandatory free-of-tie option; fully transparent and independent rent reviews; and an independent adjudicator.

He said the response to the consultation has been so conclusive that “even Robert Mugabe would have thought it a little one-sided.”

'Desperately needed'

He said: “What I am calling for today in an open and reasonable way is for all members who feel strongly to support a statutory code and give the Government the necessary impetus to take the action that is so desperately needed.”

He added: “We can sign petitions and beg pub companies to be fair this time. We can rage against how pub companies don’t seem to care about our communities. Or finally we can act.”

He highlighted examples of “aggressive pub company behaviour” distorting the market, citing several allegations involving Enterprise Inns.

'Perverse figures'

“What sticks in the core of most fair-minded people is the majority of people taking tenancies from a pub company are earning under £10,000 a year,” he continued. “It is not a situation where a few are doing well, the majority have a decent income, and a small number are failing. What we see is the majority failing.  When you have these perverse figures – where pubs doing well are badly penalised – that’s when you see we have a real desperate imperative to act.”

According to figures released by the Campaign for Real Ale (CAMRA) last year, 57% of licensees tied to large pub companies (more than 500 pubs) earn less than £10,000 a year.

Perkins added that since Friday 17 January, more than 26,000 people have signed the 38 degrees petition on the “Great British Pub Scandal” and praised the work of CAMRA, quipping that its 160,000 members create a greater union than the Conservative and Liberal Democrat party members combined.


Labour's motion noting the delay in a decision on a statutory code and stating that regulation would resolve the contractual problems between the big pub companies and their lessees was defeated by 311 votes to 244.

The Coalition's amendment welcoming the opportunity to debate the issue of fairness in the relationship between publicans and pub owning companies and stating it is right the Government carefully considers the evidence was passed by 311 votes to 246.

Related topics Legislation

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